Apple Found Guilty of Conspiring to Fix Prices in E-Book Trial [Updated]

ibooks_iconReuters briefly reports that a U.S. federal judge has found Apple guilty of price fixing in the lawsuit brought by the U.S. Department of Justice and state governments.

A federal judge on Wednesday ruled that Apple Inc conspired to raise the retail prices of e-books, and said a trial for damages will follow.

The decision by U.S. District Judge Denise Cote in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief.

The government had argued that Apple served as a "ringmaster" in conspiring with publishers to raise prices of e-books as part of an effort to change the business model of the industry and weaken Amazon's dominant position in the market. All of the publishers ultimately settled the case, but Apple fought to the end, insisting that it could not admit to doing something it did not do.

A separate trial will need to be held in order to determine damages to be levied against Apple.

We've uploaded the full 160-page decision by Judge Denise Cote for those interested in reading more.

The question in this case has always been a narrow one: whether Apple participated in a price-fixing scheme in violation of this country’s antitrust laws. Apple is liable here for facilitating and encouraging the Publisher Defendants’ collective, illegal restraint of trade. Through their conspiracy they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail e-book prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant.

Update 7:13 AM: Unsurprisingly, Apple has announced that it will appeal the decision.

Apple spokesman Tom Neumayr says Apple didn't conspire to fix e-book pricing and would continue to fight the "false accusations." He says Apple brought much needed innovation and competition into the market in 2010.

Top Rated Comments

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94 months ago
A win for the consumer

Excellent!

A win for the consumer!
Score: 49 Votes (Like | Disagree)
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94 months ago

Excellent!

A win for the consumer!


A win for the consumer, up until the point at which Amazon finishes driving out any and all competition.
Score: 38 Votes (Like | Disagree)
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94 months ago
I always felt it was pretty clear that Apple was guilty.
Score: 36 Votes (Like | Disagree)
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94 months ago
What? You mean Apple is greedy? Eye opener!
Score: 30 Votes (Like | Disagree)
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94 months ago
Where did she get her law degree at? Night School with Luis Tully?

A publisher setting the price for an eBook in the iBookstore is no different than me, as a developer, setting the price for my app in the App Store.

#EpicFail
Score: 25 Votes (Like | Disagree)
Avatar
94 months ago
This was OBVIOUS after the email from Jobs was released. I am not typically a fan of the word "greedy" to describe companies since they are in business to make money. Unfortunately Apple takes it to a new level, but they have been successful at it.

My guess is that they will pay less than they already paid their counsel.
Score: 24 Votes (Like | Disagree)

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